Despitethis popularity, there is evidence that not all performance measurementinitiatives are successful. some researchers have claimed that about 70% ofattempts to implement performance measurement systems fail. Absenceof measurable targets in the development programs to guide and assess, atintervals, the success of their implementation is a possible reason for lack ofprogress and the persistence of problems in the construction industry (Ofori,2001). Theconstruction industry is an important contributor to the economy of a country;however, it has quite an unstable nature (Toor & Ogunlana, 2009).
As aresult of rapid change and increasing uncertainty in terms of technology,budgets and operational processes, the construction industry has become morecomplicated and dynamic (Albert, 2001). Consequently, the need for improvingthe performance of the construction sector is wholly apparent. To achieve performanceimprovement, measurable objectives must be set and then used to determinecritical success factors and performance measures. Performanceis defined by Salaheldin (2009) as the degree to which an operation fulfilsprimary measures (performance objectives) in order to meet the needs of thecustomers (secondary measures).
Throughoutthe twentieth century mangers have rigorously used financial metrics forplanning and control purposes, and therefore, majority of performancemeasurement was the measurement of financial data and results. The popularityof financial data increased rapidly in the 1950s (van Schalkwyk 1998), and hasmaintained this popularity up to the point that when UK managers thought ofperformance information in the early 1990s they thought of almost exclusivelyfinancial information (Jeffries 1993). Inthe late 1970s, the 1980s and the early 1990s managers and academics started statingtheir dissatisfaction with traditional financial based performance measurementsystems (Bourne et al. 2000; Kaplan 1984; and Letza 1996). The problem lies inthe fact that financial information tends to lag, in the sense that itdescribes the outcome of managerial actions/decisions after they occur by atleast a reporting period. However, managers need current, up-to-date, andmostly nonfinancial information, to be able to take better decisions/actions.
Since1st July 2005 construction companies have had to present KPIs for previousprojects, if they wish to undertake new construction projects for the Danishstate. BEC refers here to the company’s “grade book” when the constructioncompany has collected KPIs from at least three projects. Dueto intense competition, globalization and an explosion of technology in recentyears organizational learning, knowledge creation and innovation capabilityhave emerged as the dominating factors of competitive advantage (Crossan andBerdrov, 2003; Zahra and George, 2002). Goalsetting and feedback have been proven to improve productivity (Locke andLatham, 2002).
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Goal setting theory suggests that specific and challenging goalsresult in a higher performance than moderate or easy attainable goals, vaguegoals or no goals at all (Locke and Latham, (1990).
